Retail chain grocery Bach Hoa Xanh’s new acting CEO refuses salary until company on track

Pham Van Trong was appointed acting CEO of Mobile World Investment Corporation's (MWG) grocery retail chain Bach Hoa Xanh at the company's 2023 general meeting of shareholders on Saturday.

The new acting CEO, who holds a master's degree in mathematics and computer science, announced he would not take a salary until turning Bach Hoa Xanh into an efficient operation.

"Trong is our first acting CEO to work without pay from the get-go until everything is running smoothly. That's the weirdest thing because people normally expect a higher salary when they start a new job," MWG chairman Nguyen Duc Tai said.

"It shows Trong’s great sense of responsibility, and I hope that he will lead Bach Hoa Xanh to the break-even point and a great future with MWG."

Bach Hoa Xanh has completed a comprehensive restructuring process, with no new stores opened in the past year, Tai added.

In his speech, Trong vowed to place customers at the center and turn Bach Hoa Xanh stores into a household destination, while ensuring employees’ incomes and making the company the number one e-commerce platform in Vietnam.

"Bach Hoa Xanh will break even this year," he said.

Trong, 44, joined MWG in 2004 as head of its information technology division, and became Bach Hoa Xanh Trading JSC's director of operations in 2019.

Chairman Tai said expanding sales of fresh produce is one of the orientations the retail chain is taking. "Products offered by Bach Hoa Xanh must be the freshest and cleanest with prices only slightly higher than traditional markets.

"I asked a housewife why she went to traditional markets, and she said it was just a habit. That's why Bach Hoa Xanh needs time to change this habit. In the future, it will be a destination for housewives.

"For customers who don't know what to do at weekends, they can go to supermarkets because they're large and there are more things for them to do. But for those who go shopping on a daily basis, Bach Hoa Xanh is definitely a more interesting option," Tai noted.

After restructuring, the number of Bach Hoa Xanh stores dropped nearly 20% year-on-year to 1,728 at the end of 2022, with average annual revenue of VND1.3-1.4 billion ($59,600) per store.

Bach Hoa Xanh's total revenue hit VND27 trillion ($1.15 billion) last year, equal to 96% of its record figure in 2021.

MWG's general meeting approved targets of VND135 trillion ($5.75 billion) in consolidated revenue and VND4.2 trillion ($178.8 million) in after-tax profit in 2023, slight increases from last year.

The targets were set in the context of many difficulties facing the market. In the first two months of this year, MWG recorded revenue of VND19 trillion ($810.34 million), down 25% compared to the same period last year.

The HCMC-based retail giant reported an after-tax profit of VND4.1 trillion ($174 million) in 2022, down 16% year-on-year, fulfilling 65% of its target. Net revenue hit VND133.41 trillion ($5.66 billion), up 8%, according to its consolidated financial report.

As of December 31, 2022, MWG's total assets stood at VND55.83 trillion ($2.37 billion), down 11% from the beginning of the year, of which inventory accounted for VND25.7 trillion ($1.09 billion), down 12%.

On the Ho Chi Minh Stock Exchange, MWG closed the Friday session at VND39,000 ($1.66) per share, a drop of nearly 48% from its peak of VND80,000 ($3.23) recorded in April 2022.